International Traffic in Arms Regulations: Dual Nationals and Third-Country Nationals Employed by End-Users, 28174-28178 [2011-11697]
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Federal Register / Vol. 76, No. 94 / Monday, May 16, 2011 / Rules and Regulations
Terminal Instrument Procedures
(TERPS). In developing these changes to
SIAPs, the TERPS criteria were applied
only to specific conditions existing at
the affected airports. All SIAP
amendments in this rule have been
previously issued by the FAA in a FDC
NOTAM as an emergency action of
immediate flight safety relating directly
to published aeronautical charts. The
circumstances which created the need
for all these SIAP amendments requires
making them effective in less than 30
days.
Because of the close and immediate
relationship between these SIAPs and
safety in air commerce, I find that notice
and public procedure before adopting
these SIAPs are impracticable and
contrary to the public interest and,
where applicable, that good cause exists
for making these SIAPs effective in less
than 30 days.
Conclusion
The FAA has determined that this
regulation only involves an established
body of technical regulations for which
frequent and routine amendments are
AIRAC date
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State
necessary to keep them operationally
current. It, therefore—(1) Is not a
‘‘significant regulatory action’’ under
Executive Order 12866; (2) is not a
‘‘significant rule’’ under DOT regulatory
Policies and Procedures (44 FR 11034;
February 26, 1979); and (3) does not
warrant preparation of a regulatory
evaluation as the anticipated impact is
so minimal. For the same reason, the
FAA certifies that this amendment will
not have a significant economic impact
on a substantial number of small entities
under the criteria of the Regulatory
Flexibility Act.
List of Subjects in 14 CFR Part 97
Air traffic control, Airports,
Incorporation by reference, and
Navigation (air).
Issued in Washington, DC, on April 29,
2011.
Ray Towles,
Deputy Director, Flight Standards Service.
Adoption of the Amendment
Accordingly, pursuant to the
authority delegated to me, Title 14,
Code of Federal Regulations, part 97, 14
FDC No.
Authority: 49 U.S.C. 106(g), 40103, 40106,
40113, 40114, 40120, 44502, 44514, 44701,
44719, 44721–44722.
2. Part 97 is amended to read as
follows:
■
§§ 97.23, 97.25, 97.27, 97.29, 97.31, 97.33,
97.35 [AMENDED]
By amending: § 97.23 VOR, VOR/
DME, VOR or TACAN, and VOR/DME
or TACAN; § 97.25 LOC, LOC/DME,
LDA, LDA/DME, SDF, SDF/DME;
§ 97.27 NDB, NDB/DME; § 97.29 ILS,
ILS/DME, MLS, MLS/DME, MLS/RNAV;
§ 97.31 RADAR SIAPs; § 97.33 RNAV
SIAPs; and § 97.35 COPTER SIAPs,
Identified as follows:
* * * Effective Upon Publication
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[FR Doc. 2011–11370 Filed 5–13–11; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF STATE
22 CFR Parts 120, 124, and 126
RIN 1400–AC68
[Public Notice: 7428]
International Traffic in Arms
Regulations: Dual Nationals and ThirdCountry Nationals Employed by EndUsers
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1. The authority citation for part 97
continues to read as follows:
■
Airport
IN
OH
OH
KS
Department of State.
Final rule.
AGENCY:
The Department of State is
amending the International Traffic in
Arms Regulations (ITAR) to establish a
SUMMARY:
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PART 97—STANDARD INSTRUMENT
APPROACH PROCEDURES
City
.....
.....
.....
.....
ACTION:
CFR part 97, is amended by amending
Standard Instrument Approach
Procedures, effective at 0901 UTC on
the dates specified, as follows:
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policy to address those who are unable
to implement the exemption for intracompany, intra-organization, and intragovernment transfers of defense articles
and defense services by approved endusers to dual national and third-country
nationals who are employees of such
approved end-users. Prior to making
transfers to certain dual national and
third-country national employees under
this policy, approved end-users must
screen employees, make an affirmative
decision to allow access, and maintain
records of screening procedures to
prevent diversion of ITAR-controlled
technology for purposes other than
those authorized by the applicable
export license or other authorization.
Effective Date: This rule is
effective August 15, 2011.
DATES:
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FDC date
Subject
NDB RWY 27, Amdt 5A
RNAV (GPS) RWY 5, Orig
VOR RWY 5, Amdt 3
Takeoff Minimums and Obstacle
DP, Orig
Takeoff Minimums and Obstacle
DP, Amdt 4
VOR RWY 29, Amdt 8
RNAV (GPS) RWY 4L, Amdt 1B
ILS OR LOC RWY 27, Orig
ILS OR LOC RWY 36, Amdt 9
ILS OR LOC RWY 31, Amdt 7A
ILS Z RWY 11, Amdt 12A
ILS Y RWY 11, Orig-A
FOR FURTHER INFORMATION CONTACT:
Director Charles B. Shotwell, Office of
Defense Trade Controls Policy,
Department of State, Telephone (202)
663–2792 or Fax (202) 261–8199; E-mail
DDTCResponseTeam@state.gov. ATTN:
Regulatory Change, Dual and ThirdCountry Nationals.
This is
part of the President’s Export Control
Reform effort. The Department of State
is amending parts 124 and 126 of the
ITAR to reflect new policy regarding
end-user employment of dual nationals
and third-country nationals.
As a part of the President’s Task Force
on Export Control Reform, the previous
policy regarding the treatment of dual
nationals and third-country nationals
employed by approved end users was
re-evaluated. A proposed rule to
SUPPLEMENTARY INFORMATION:
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eliminate the separate licensing
requirement for dual nationals and
third-country nationals employed by
licensed end-users was presented for
public comment. The proposed rule had
a comment period ending September 10,
2010. Thirty-two (32) parties filed
comments recommending changes.
Having thoroughly reviewed and
evaluated the comments and the
recommended changes, the Department
has determined that it will, and hereby
does, adopt the proposed rule, with
changes noted and minor edits, and
promulgates it as a final rule. The
Department’s evaluation of the written
comments and recommendations
follows.
Comment Analysis
The overwhelming majority of
commenting parties expressed
dissatisfaction with the current rule
regarding dual and third-country
nationals, citing conflicts with foreign
human rights laws as well as the burden
of compliance, and welcomed the
Directorate of Defense Trade Controls’
(DDTC) efforts to reform current
practice. One commenting party
asserted that the ‘‘tremendous
administrative burden’’ imposed on
foreign end-users is exaggerated. By
contrast, six inputs, including one from
a group representing 21 nations, agreed
with the assessment that current rules
impose a large administrative burden,
such as separate accounting and
licensing of foreign nationals. Four
commenting parties, including a major
U.S. industry association, pointed out
that the current rule is an extensive
administrative burden for U.S.
manufacturers and exporters, not just
foreign end-users, and places U.S.
companies at a disadvantage with
foreign competitors.
One commenting party recommended
adding language to § 126.18(a) to make
clear that the exemption applies
‘‘notwithstanding any other provisions
of this Part’’ to make clear that the
limitations of the last sentence of
§ 126.1(a), which would have conflicted
with the intent of the proposed rule, did
not apply. DDTC agreed and adopted
this change.
One commenting party argued that
the current nationality (or place of birth)
standard should stay in place, citing
recent prosecutions of Chi Mak, Greg
Chung, and Noshir Gowadia. We note
that all three cases involve naturalized
U.S. citizens, whose prosecutions would
not have been affected by the proposed
rule. It should also be pointed out that
even if the proposed rule had applied to
them, all three would have failed the
substantive contacts test and, thus,
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could not have received the defense
articles at issue under the exemption.
Another commenting party criticized
the concept of ‘‘substantive contacts’’ in
favor of clarifying the definition of ‘‘nonU.S.’’ person or foreign person. We note
that the current definition of foreign
person in § 120.16 is consistent with
both U.S. law and usage in the proposed
rule. Therefore, we find no need to
change the definition of foreign person
and do not adopt the recommendation.
One commenting party, a large U.S.
aerospace firm, argued that DDTC
should return to its pre-1999 rules,
where there was no additional licensing
requirement for dual nationals or thirdcountry nationals working for
authorized end-users. This option was
explored early on in the development of
this proposed rule, but DDTC chose not
to pursue that option any further due to
policy implications outside of the
Department of State.
Ten commenting parties
recommended that the exemption
proposed in § 126.18 be expanded to
include ‘‘defense services.’’ The current
proposal was limited to ‘‘defense
articles,’’ which by the definition in
§ 120.6 includes technical data. We note
that the rule was intended to address
concerns about restrictions on dual
national and third-country national
employees of licensed end-users and
consignees who would have access to
defense articles, which, as noted above,
includes technical data per § 120.6,
within the scope of their employment.
The intent of the rule was to create a
policy for such transfers in a manner
that would prevent diversions of such
articles to unauthorized end-users.
Thus, the proposed rule was limited to
use of the defense article within a
company and within the scope of the
license in question. Defense services, on
the other hand, cannot be ‘‘transferred’’
within a company in the manner in
which defense articles can. Rather,
defense services are rendered to specific
end-users identified in the license or
other authorization. As such, the
defense services are rendered to the
named company rather than the
individual employees. In any event, if
the contemplated defense service
involves defense articles already
licensed to the company, the proposed
exemption would generally cover dual
and third-country national employees
receiving the defense service. We deem
it neither necessary nor prudent to
specifically add defense services to this
rule and thus do not adopt the
recommendation.
One commenting party asserted that
there was uncertainty regarding whether
the exemption applied to academic
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institutions. This proposed rule is an
incremental change in favor of foreign
business entities, foreign governmental
entities, and international organizations,
recognizing internal incentives for the
protection of export controlled articles
and data. The Department of State is not
prepared to extend the exemption to
academic institutions at the present
time.
Ten commenting parties
recommended that the current § 124.16
not be removed. That provision allows
for a limited exception for access to
unclassified defense articles exported in
furtherance of or produced as a result of
a Technical Assistance Agreement/
Manufacturing License Agreement,
retransfer of technical data and defense
services to dual national and thirdcountry national employees of licensed
signatories that are nationals exclusively
of NATO member states, EU member
states, Australia, Japan, New Zealand, or
Switzerland. A major concern was that
the proposed rule, unlike § 124.16, did
not include approved sub-licensees.
After careful consideration, we
concurred with the recommendation to
retain § 124.16 and have amended the
section to include workers who have
long term employment relationships
with licensed end-users, per a new
definition to ‘‘regular employee’’ added
in part 120.
One foreign governmental
commenting party observed that there is
a need to expand the exemption beyond
the physical territories of the
governmental end-user or international
organization. For example, such would
be required to facilitate repair of a
disabled aircraft overseas. This change
was adopted subject to a requirement
that such operations are in the conduct
of official business by the government or
international organization and provided
such activities are within the scope of
the license.
Nine commenting parties
recommended the proposed rule apply
to contract employees, not just ‘‘bona
fide, regular employees.’’ The intent of
the proposed rule was to recognize
vested interests within companies,
international organizations, and foreign
governmental entities to carefully screen
employees for purposes of
trustworthiness. Full-time employment
meets that criterion as it indicates a
higher level of scrutiny and represents
a long-term relationship with the entity
at issue, as opposed to the transactional,
temporary nature of the contractual
arrangement. Furthermore, companies,
international organizations, and foreign
governmental entities bear significantly
more legal responsibility for the acts of
their regular employees than they do for
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the acts of contactors. However, DDTC
is prepared to narrowly extend this
policy to workers who have long term
employment relationships with licensed
end-users, per a new definition to
‘‘regular employee’’ added in part 120.
Several commenting parties
recommended clarification of the
meaning of ‘‘substantive contacts.’’
Many of the requests for clarification
center around specific areas discussed
below. One commenting party
expressed concern that any employee
with a family member in a proscribed
country would automatically be
disqualified. It is not DDTC’s intent to
deny access based solely upon
relationships or contacts with family
members in a context posing no risk of
diversion. We note that contacts with
government officials and agents of
governments of § 126.1(a) countries, be
they family or not, would require higher
scrutiny.
Another commenting party expressed
concern that any personal or business
travel to a country listed in § 126.1
would disqualify that person from
access to a defense article. The intent of
the proposed rule is not to automatically
disqualify a person on the basis of such
travel, where the travel does not involve
contacts with foreign agents or proxies
likely to lead to diversion of controlled
data or articles. Instead, full disclosure
about travel is required, which would be
the basis of an assessment of diversion
risk on a case-by-case basis.
One commenting party objected to the
limitation of the exemption to the
country where the end-user is located,
pointing out that international
organizations operate in more than one
country. We note that licenses for
international organization end-users
will specify the location(s) and
country(ies) where the end-item will be
utilized. Therefore, DDTC believes that
transfers to locations (and end-users)
within the scope of the license poses no
problems. Any contemplated transfers
beyond the authorized and licensed
location(s) will require an additional
license (or an amendment to an existing
license), and is a prudent limitation on
the rule. This rule is not intended to
authorize unlimited transfers around the
world for end-users with nominal
connections throughout the globe.
One commenting party recommended
that the requirement for screening not
apply to citizens (including dual
nationals) and permanent residents of
the host country. This approach would
exclude from screening a large group of
individuals who continue to maintain
affiliation by citizenship with a third
country (i.e., different than that of the
authorized end-user). Though we agree
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that citizens who relinquish citizenship
of the former country would not require
screening, the nature of continuing
relationships with the third country for
those maintaining citizenship remains
relevant, especially if the country is
subject to restrictions in § 126.1. In any
event, this rule does not present foreign
citizenship alone as a bar to access to
ITAR controlled defense articles.
Several commenting parties
recommended clarification of whether
the proposed rule would apply to both
classified and unclassified data. In the
absence of explicit inclusion, this rule
will not apply to classified data. The
word ‘‘unclassified’’ was added to the
first sentence in § 126.18(a) as a
qualifier to make the point clearer. We
note that the release of classified data to
foreign persons is governed by separate
National Disclosure directives and
policies. To be clear, this rule is not a
grant of a separate authority for the
transfer of classified information.
Several commenting parties expressed
concern about the record-keeping
requirements, especially where local
privacy laws may apply. We note that
the records in question are intended for
use by DDTC, a governmental entity for
governmental use and not for public
release. DDTC’s function in this
capacity is analogous to the exchange of
information with cross-border law
enforcement agencies that regularly
receive and have a similar obligation to
protect information subject to privacy
laws.
expenditure by State, local, and tribal
governments, in the aggregate, or by the
private sector, of $100 million or more
in any year and it will not significantly
or uniquely affect small governments.
Therefore, no actions were deemed
necessary under the provisions of the
Unfunded Mandates Reform Act of
1995.
Regulatory Analysis and Notices
The Department of State does not
consider this rule to be a ‘‘significant
regulatory action’’ under Executive
Order 12866, section 3(f), Regulatory
Planning and Review. The Department
is of the opinion that restricting defense
articles exports is a foreign affairs
function of the United States
Government and that rules governing
the conduct of this function are exempt
from the requirements of Executive
Order 12866.
Administrative Procedure Act
The Department of State is of the
opinion that restricting defense article
exports is a foreign affairs function of
the United States Government and that
rules implementing this function are
exempt from § 553 (Rulemaking) and
§ 554 (Adjudications) of the
Administrative Procedure Act. Although
the Department is of the opinion that
this rule is exempt from the rulemaking
provisions of the APA, the Department
published this rule with a 60-day
provision for public comment and
without prejudice to its determination
that restricting defense article exports is
a foreign affairs function.
Regulatory Flexibility Act
Since this amendment is not subject
to the provisions of 5 U.S.C. § 553(b), it
does not require analysis under the
Regulatory Flexibility Act.
Unfunded Mandates Reform Act of 1995
This amendment does not involve a
mandate that will result in the
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Small Business Regulatory Enforcement
Fairness Act of 1996
This amendment has been found not
to be a major rule within the meaning
of the Small Business Regulatory
Enforcement Fairness Act of 1996.
Executive Orders 12372 and 13132
This amendment will not have
substantial direct effects on the States,
on the relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government. Therefore, in
accordance with Executive Order 13132,
it is determined that this amendment
does not have sufficient federalism
implications to require consultations or
warrant the preparation of a federalism
summary impact statement. The
regulations implementing Executive
Order 12372 regarding
intergovernmental consultation on
Federal programs and activities do not
apply to this amendment.
Executive Order 12866
Executive Order 13563
The Department of State has
considered this rule in light of Section
1(b) of Executive Order 13563, dated
January 18, 2011, and affirms that this
regulation is consistent with the
guidance therein.
Executive Order 12988
The Department of State has reviewed
the proposed amendment in light of
sections 3(a) and 3(b)(2) of Executive
Order 12988 to eliminate ambiguity,
minimize litigation, establish clear legal
standards, and reduce burden.
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Executive Order 13175
The Department of State has
determined that this rulemaking will
not have tribal implications, will not
impose substantial direct compliance
costs on Indian tribal governments, and
will not pre-empt tribal law.
Accordingly, the requirement of Section
5 of Executive Order 13175 does not
apply to this rulemaking.
Paperwork Reduction Act
The Department of State is of the
opinion that this rule does not impose
any new reporting or recordkeeping
requirements subject to the Paperwork
Reduction Act, 44 U.S.C. Chapter 35,
but will provide a separate Federal
Register notification regarding such
requirements.
List of Subjects in 22 CFR Parts 120,
124, and 126
Arms and munitions, Exports.
Accordingly, for the reasons set forth
above, Title 22, Chapter I, Subchapter
M, parts 120, 124, and 126 are amended
as follows:
PART 120—PURPOSE AND
DEFINITIONS
PART 124—AGREEMENTS, OFFSHORE PROCUREMENT AND OTHER
DEFENSE SERVICES
3. The authority citation for part 124
continues to read as follows:
■
Authority: Sec. 2, 38, and 71, Pub. L. 90–
629, 90 Stat. 744 (22 U.S.C. 2752, 2778,
2797); E.O. 11958, 42 FR 4311; 3 CFR 1977
Comp. p. 79; 22 U.S.C. 2651a; 22 U.S.C. 2776;
Pub. L. 105–261.
4. In § 124.8, paragraph (5) is revised
to read as follows:
■
§ 124.8 Clauses required both in
manufacturing license agreements and
technical assistance agreements.
*
*
*
*
*
(5) The technical data or defense
service exported from the United States
in furtherance of this agreement and any
defense article which may be produced
or manufactured from such technical
data or defense service may not be
transferred to a foreign person except
pursuant to §§ 124.16 and 126.18, as
specifically authorized in this
agreement, or where prior written
approval of the Department of State has
been obtained.
*
*
*
*
*
■
1. The authority citation for part 120
continues to read as follows:
■
Authority: Secs. 2, 38, and 71, Pub. L. 90–
629, 90 Stat. 744 (22 U.S.C. 2752, 2778,
2797); 22 U.S.C. 2794; E.O. 11958, 42 FR
4311; E.O. 13284, 68 FR 4075; 3 CFR, 1977
Comp. p. 79; 22 U.S.C. 2651a; Pub. L. 105–
261, 112 Stat. 1920.
§ 124.16 Special retransfer authorizations
for unclassified technical data and defense
services to member states of NATO and the
European Union, Australia, Japan, New
Zealand, and Switzerland.
§§ 120.33 through 120.38
5. Section 124.16 is revised to read as
follows:
[Reserved]
2. Add reserved §§ 120.33 through
120.38 and § 120.39 to read as follows:
■
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§ 120.39
Regular employee.
(a) A regular employee means for
purposes of this subchapter:
(1) An individual permanently and
directly employed by the company, or
(2) An individual in a long term
contractual relationship with the
company where the individual works at
the company’s facilities, works under
the company’s direction and control,
works full time and exclusively for the
company, and executes nondisclosure
certifications for the company, and
where the staffing agency that has
seconded the individual has no role in
the work the individual performs (other
than providing that individual for that
work) and the staffing agency would not
have access to any controlled
technology (other than where
specifically authorized by a license).
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The provisions of § 124.8(5) of this
subchapter notwithstanding, the
Department may approve access to
unclassified defense articles exported in
furtherance of or produced as a result of
a TAA/MLA, and retransfer of technical
data and defense services to individuals
who are dual national or third-country
national employees of the foreign
signatory or its approved sub-licensees,
including the transfer to dual nationals
or third-country nationals who are bona
fide regular employees, directly
employed by the foreign signatory or
approved sub-licensees, provided they
are nationals exclusively of countries
that are members of NATO the
European Union, Australia, Japan, New
Zealand, and Switzerland and their
employer is a signatory to the agreement
or has executed a Non Disclosure
Agreement. The retransfer must take
place completely within the physical
territories of these countries or the
United States. Permanent retransfer of
hardware is not authorized.
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PART 126—GENERAL POLICIES AND
PROVISIONS
6. The authority citation for part 126
continues to read as follows:
■
Authority: Secs. 2, 38, 40, 42, and 71, Pub.
L. 90–629, 90 Stat. 744 (22 U.S.C. 2752, 2778,
2780, 2791, and 2797); E.O. 11958, 42 FR
4311; 3 CFR, 1977 Comp., p.79; 22 U.S.C.
2651a; 22 U.S.C. 287c; E.O. 12918; 59 FR
28205, 3 CFR, 1994 Comp. p. 899; Sec. 1225,
Pub. L. 108–375.
§§ 126.16 and 126.17
[Reserved]
7. Add reserved §§ 126.16 and 126.17
and § 126.18 to read as follows:
■
§ 126.18 Exemptions regarding intracompany, intra-organization, and intragovernmental transfers to employees who
are dual nationals or third-country
nationals.
(a) Subject to the requirements of
paragraphs (b) and (c) of this section
and notwithstanding any other
provisions of this part, and where the
exemption provided in § 124.16 cannot
be implemented because of applicable
domestic laws, no approval is needed
from the Directorate of Defense Trade
Controls (DDTC) for the transfer of
unclassified defense articles, which
includes technical data (see § 120.6), to
or within a foreign business entity,
foreign governmental entity, or
international organization that is an
authorized end-user or consignee
(including approved sub-licensees) for
those defense articles, including the
transfer to dual nationals or thirdcountry nationals who are bona fide
regular employees, directly employed
by the foreign consignee or end-user.
The transfer of defense articles pursuant
to this section must take place
completely within the physical territory
of the country where the end-user is
located, where the governmental entity
or international organization conducts
official business, or where the consignee
operates, and be within the scope of an
approved export license, other export
authorization, or license exemption.
(b) The provisions of § 127.1(b) are
applicable to any transfer under this
section. As a condition of transferring to
foreign person employees described in
paragraph (a) of this section any defense
article under this provision, any foreign
business entity, foreign governmental
entity, or international organization, as
a ‘‘foreign person’’ within the meaning of
§ 120.16, that receives a defense article,
must have effective procedures to
prevent diversion to destinations,
entities, or for purposes other than those
authorized by the applicable export
license or other authorization (e.g.,
written approval or exemption) in order
to comply with the applicable
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provisions of the Arms Export Control
Act and the ITAR.
(c) The end-user or consignee may
satisfy the condition in paragraph (b) of
this section, prior to transferring defense
articles, by requiring:
(1) A security clearance approved by
the host nation government for its
employees, or
(2) The end-user or consignee to have
in place a process to screen its
employees and to have executed a NonDisclosure Agreement that provides
assurances that the employee will not
transfer any defense articles to persons
or entities unless specifically authorized
by the consignee or end-user. The enduser or consignee must screen its
employees for substantive contacts with
restricted or prohibited countries listed
in § 126.1. Substantive contacts include
regular travel to such countries, recent
or continuing contact with agents,
brokers, and nationals of such countries,
continued demonstrated allegiance to
such countries, maintenance of business
relationships with persons from such
countries, maintenance of a residence in
such countries, receiving salary or other
continuing monetary compensation
from such countries, or acts otherwise
indicating a risk of diversion. Although
nationality does not, in and of itself,
prohibit access to defense articles, an
employee who has substantive contacts
with persons from countries listed in
§ 126.1(a) shall be presumed to raise a
risk of diversion, unless DDTC
determines otherwise. End-users and
consignees must maintain a technology
security/clearance plan that includes
procedures for screening employees for
such substantive contacts and maintain
records of such screening for five years.
The technology security/clearance plan
and screening records shall be made
available to DDTC or its agents for civil
and criminal law enforcement purposes
upon request.
Dated: April 26, 2011.
Ellen O. Tauscher,
Under Secretary, Arms Control and
International Security, Department of State.
[FR Doc. 2011–11697 Filed 5–13–11; 8:45 am]
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DEPARTMENT OF THE INTERIOR
Bureau of Ocean Energy Management,
Regulation and Enforcement
30 CFR Part 285
[Docket ID: BOEM–2010–0045]
RIN 1010–AD71
Renewable Energy Alternate Uses of
Existing Facilities on the Outer
Continental Shelf—Acquire a Lease
Noncompetitively
Bureau of Ocean Energy
Management, Regulation and
Enforcement (BOEMRE), Interior.
ACTION: Final rule.
AGENCY:
This final rule revises
BOEMRE regulations that pertain to
noncompetitive acquisition of an Outer
Continental Shelf (OCS) renewable
energy lease. We are taking this action
because under the current regulations
the process for acquiring a lease
noncompetitively that is initiated by an
unsolicited request is inconsistent with
the process for acquiring a lease
noncompetitively that is initiated by
BOEMRE. By revising regulations which
govern the lease acquisition process
starting with submission of an
unsolicited request, and regulations
which govern the lease acquisition
process starting with BOEMRE issuance
of a Request for Interest (RFI) or a Call
for Information and Nomination (Call),
this rulemaking will make the two
processes consistent with each other.
DATES: Effective Date: This final rule is
effective June 15, 2011.
FOR FURTHER INFORMATION CONTACT:
Timothy Redding at (703) 787–1219.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
As originally written, § 285.231
allowed the award of a noncompetitive
lease after BOEMRE received an
unsolicited request for a noncompetitive
lease if BOEMRE determined that there
was no competitive interest after
publishing a single notice of a request
for interest relating to the unsolicited
request for a noncompetitive lease. As
originally written, § 285.232 provided
that if BOEMRE published an RFI or
Call resulting in a single expression of
interest in a discrete portion within the
RFI or Call area, BOEMRE could offer a
lease for that area through a
noncompetitive process only if it also
issued a notice of request for interest as
required by § 285.231(b) and
subsequently determined that there was
no competitive interest based on
responses to that notice.
PO 00000
Frm 00014
Fmt 4700
Sfmt 4700
BOEMRE believes that the
requirement for another notice
following an RFI or Call was redundant
and was at odds with the
noncompetitive process prescribed for
cases in which a party submitted an
unsolicited request for an OCS
renewable energy lease, where BOEMRE
is required to publish only a single
notice. The final rule revises
§ 285.232(c) to refer to the process
outlined in § 285.231(d) through (i)
rather than § 285.231(b) through (i),
thereby eliminating this discrepancy by
requiring only one RFI notice for
determining competitive interest in all
cases. This will make BOEMRE’s leasing
processes more streamlined and
efficient while maintaining BOEMRE’s
obligations to notify the public of areas
that may be leased, to solicit public
input regarding those areas, and to
determine whether competitive interest
exists in acquiring leases in those areas.
Comments on the Proposed Rule
BOEMRE published a proposed rule
on February 16, 2011 (76 FR 8962), and
received a total of 76 comments.
The Offshore Wind Development
Coalition, the National Hydropower
Association, Offshore MW LLC, the
American Wind Energy Association,
and the National Wildlife Federation
expressed support for revising the rule
as proposed and endorsed BOEMRE’s
rationale for doing so.
The Alliance to Protect Nantucket
Sound (APNS) and the Oceans Public
Trust Initiative (OPTI) objected to
revising the rule and objected to
BOEMRE’s rationale. The APNS stated
that the proposed rule would promote a
land rush attitude, diminish
competition, and marginalize public
review by shortening the environmental
review process for OCS wind
developers. The OPTI stated that it
appears that the sole purpose for
revising the regulations appears to be to
make leasing move more quickly, which
could be at the expense of more careful
and balanced review. The OPTI also
stated that revising the rule as proposed
promotes collusion among industry
participants. Defenders of Wildlife did
not explicitly offer an opinion in favor
of or in opposition to the proposed rule
revision. However, it stated that, ‘‘In
proposing to arbitrarily set a new
criteria for an expedited accelerated
permitting process solely on the basis of
the number of applicants for a lease at
a particular location, BOEMRE appears
to ignore in this rulemaking any and all
parameters that make a particular
location unique * * *.’’
BOEMRE received 68 comments from
private citizens, 3 that expressed
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Agencies
[Federal Register Volume 76, Number 94 (Monday, May 16, 2011)]
[Rules and Regulations]
[Pages 28174-28178]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-11697]
=======================================================================
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DEPARTMENT OF STATE
22 CFR Parts 120, 124, and 126
RIN 1400-AC68
[Public Notice: 7428]
International Traffic in Arms Regulations: Dual Nationals and
Third-Country Nationals Employed by End-Users
AGENCY: Department of State.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of State is amending the International Traffic
in Arms Regulations (ITAR) to establish a policy to address those who
are unable to implement the exemption for intra-company, intra-
organization, and intra-government transfers of defense articles and
defense services by approved end-users to dual national and third-
country nationals who are employees of such approved end-users. Prior
to making transfers to certain dual national and third-country national
employees under this policy, approved end-users must screen employees,
make an affirmative decision to allow access, and maintain records of
screening procedures to prevent diversion of ITAR-controlled technology
for purposes other than those authorized by the applicable export
license or other authorization.
DATES: Effective Date: This rule is effective August 15, 2011.
FOR FURTHER INFORMATION CONTACT: Director Charles B. Shotwell, Office
of Defense Trade Controls Policy, Department of State, Telephone (202)
663-2792 or Fax (202) 261-8199; E-mail DDTCResponseTeam@state.gov.
ATTN: Regulatory Change, Dual and Third-Country Nationals.
SUPPLEMENTARY INFORMATION: This is part of the President's Export
Control Reform effort. The Department of State is amending parts 124
and 126 of the ITAR to reflect new policy regarding end-user employment
of dual nationals and third-country nationals.
As a part of the President's Task Force on Export Control Reform,
the previous policy regarding the treatment of dual nationals and
third-country nationals employed by approved end users was re-
evaluated. A proposed rule to
[[Page 28175]]
eliminate the separate licensing requirement for dual nationals and
third-country nationals employed by licensed end-users was presented
for public comment. The proposed rule had a comment period ending
September 10, 2010. Thirty-two (32) parties filed comments recommending
changes. Having thoroughly reviewed and evaluated the comments and the
recommended changes, the Department has determined that it will, and
hereby does, adopt the proposed rule, with changes noted and minor
edits, and promulgates it as a final rule. The Department's evaluation
of the written comments and recommendations follows.
Comment Analysis
The overwhelming majority of commenting parties expressed
dissatisfaction with the current rule regarding dual and third-country
nationals, citing conflicts with foreign human rights laws as well as
the burden of compliance, and welcomed the Directorate of Defense Trade
Controls' (DDTC) efforts to reform current practice. One commenting
party asserted that the ``tremendous administrative burden'' imposed on
foreign end-users is exaggerated. By contrast, six inputs, including
one from a group representing 21 nations, agreed with the assessment
that current rules impose a large administrative burden, such as
separate accounting and licensing of foreign nationals. Four commenting
parties, including a major U.S. industry association, pointed out that
the current rule is an extensive administrative burden for U.S.
manufacturers and exporters, not just foreign end-users, and places
U.S. companies at a disadvantage with foreign competitors.
One commenting party recommended adding language to Sec. 126.18(a)
to make clear that the exemption applies ``notwithstanding any other
provisions of this Part'' to make clear that the limitations of the
last sentence of Sec. 126.1(a), which would have conflicted with the
intent of the proposed rule, did not apply. DDTC agreed and adopted
this change.
One commenting party argued that the current nationality (or place
of birth) standard should stay in place, citing recent prosecutions of
Chi Mak, Greg Chung, and Noshir Gowadia. We note that all three cases
involve naturalized U.S. citizens, whose prosecutions would not have
been affected by the proposed rule. It should also be pointed out that
even if the proposed rule had applied to them, all three would have
failed the substantive contacts test and, thus, could not have received
the defense articles at issue under the exemption.
Another commenting party criticized the concept of ``substantive
contacts'' in favor of clarifying the definition of ``non-U.S.'' person
or foreign person. We note that the current definition of foreign
person in Sec. 120.16 is consistent with both U.S. law and usage in
the proposed rule. Therefore, we find no need to change the definition
of foreign person and do not adopt the recommendation.
One commenting party, a large U.S. aerospace firm, argued that DDTC
should return to its pre-1999 rules, where there was no additional
licensing requirement for dual nationals or third-country nationals
working for authorized end-users. This option was explored early on in
the development of this proposed rule, but DDTC chose not to pursue
that option any further due to policy implications outside of the
Department of State.
Ten commenting parties recommended that the exemption proposed in
Sec. 126.18 be expanded to include ``defense services.'' The current
proposal was limited to ``defense articles,'' which by the definition
in Sec. 120.6 includes technical data. We note that the rule was
intended to address concerns about restrictions on dual national and
third-country national employees of licensed end-users and consignees
who would have access to defense articles, which, as noted above,
includes technical data per Sec. 120.6, within the scope of their
employment. The intent of the rule was to create a policy for such
transfers in a manner that would prevent diversions of such articles to
unauthorized end-users. Thus, the proposed rule was limited to use of
the defense article within a company and within the scope of the
license in question. Defense services, on the other hand, cannot be
``transferred'' within a company in the manner in which defense
articles can. Rather, defense services are rendered to specific end-
users identified in the license or other authorization. As such, the
defense services are rendered to the named company rather than the
individual employees. In any event, if the contemplated defense service
involves defense articles already licensed to the company, the proposed
exemption would generally cover dual and third-country national
employees receiving the defense service. We deem it neither necessary
nor prudent to specifically add defense services to this rule and thus
do not adopt the recommendation.
One commenting party asserted that there was uncertainty regarding
whether the exemption applied to academic institutions. This proposed
rule is an incremental change in favor of foreign business entities,
foreign governmental entities, and international organizations,
recognizing internal incentives for the protection of export controlled
articles and data. The Department of State is not prepared to extend
the exemption to academic institutions at the present time.
Ten commenting parties recommended that the current Sec. 124.16
not be removed. That provision allows for a limited exception for
access to unclassified defense articles exported in furtherance of or
produced as a result of a Technical Assistance Agreement/Manufacturing
License Agreement, retransfer of technical data and defense services to
dual national and third-country national employees of licensed
signatories that are nationals exclusively of NATO member states, EU
member states, Australia, Japan, New Zealand, or Switzerland. A major
concern was that the proposed rule, unlike Sec. 124.16, did not
include approved sub-licensees. After careful consideration, we
concurred with the recommendation to retain Sec. 124.16 and have
amended the section to include workers who have long term employment
relationships with licensed end-users, per a new definition to
``regular employee'' added in part 120.
One foreign governmental commenting party observed that there is a
need to expand the exemption beyond the physical territories of the
governmental end-user or international organization. For example, such
would be required to facilitate repair of a disabled aircraft overseas.
This change was adopted subject to a requirement that such operations
are in the conduct of official business by the government or
international organization and provided such activities are within the
scope of the license.
Nine commenting parties recommended the proposed rule apply to
contract employees, not just ``bona fide, regular employees.'' The
intent of the proposed rule was to recognize vested interests within
companies, international organizations, and foreign governmental
entities to carefully screen employees for purposes of trustworthiness.
Full-time employment meets that criterion as it indicates a higher
level of scrutiny and represents a long-term relationship with the
entity at issue, as opposed to the transactional, temporary nature of
the contractual arrangement. Furthermore, companies, international
organizations, and foreign governmental entities bear significantly
more legal responsibility for the acts of their regular employees than
they do for
[[Page 28176]]
the acts of contactors. However, DDTC is prepared to narrowly extend
this policy to workers who have long term employment relationships with
licensed end-users, per a new definition to ``regular employee'' added
in part 120.
Several commenting parties recommended clarification of the meaning
of ``substantive contacts.'' Many of the requests for clarification
center around specific areas discussed below. One commenting party
expressed concern that any employee with a family member in a
proscribed country would automatically be disqualified. It is not
DDTC's intent to deny access based solely upon relationships or
contacts with family members in a context posing no risk of diversion.
We note that contacts with government officials and agents of
governments of Sec. 126.1(a) countries, be they family or not, would
require higher scrutiny.
Another commenting party expressed concern that any personal or
business travel to a country listed in Sec. 126.1 would disqualify
that person from access to a defense article. The intent of the
proposed rule is not to automatically disqualify a person on the basis
of such travel, where the travel does not involve contacts with foreign
agents or proxies likely to lead to diversion of controlled data or
articles. Instead, full disclosure about travel is required, which
would be the basis of an assessment of diversion risk on a case-by-case
basis.
One commenting party objected to the limitation of the exemption to
the country where the end-user is located, pointing out that
international organizations operate in more than one country. We note
that licenses for international organization end-users will specify the
location(s) and country(ies) where the end-item will be utilized.
Therefore, DDTC believes that transfers to locations (and end-users)
within the scope of the license poses no problems. Any contemplated
transfers beyond the authorized and licensed location(s) will require
an additional license (or an amendment to an existing license), and is
a prudent limitation on the rule. This rule is not intended to
authorize unlimited transfers around the world for end-users with
nominal connections throughout the globe.
One commenting party recommended that the requirement for screening
not apply to citizens (including dual nationals) and permanent
residents of the host country. This approach would exclude from
screening a large group of individuals who continue to maintain
affiliation by citizenship with a third country (i.e., different than
that of the authorized end-user). Though we agree that citizens who
relinquish citizenship of the former country would not require
screening, the nature of continuing relationships with the third
country for those maintaining citizenship remains relevant, especially
if the country is subject to restrictions in Sec. 126.1. In any event,
this rule does not present foreign citizenship alone as a bar to access
to ITAR controlled defense articles.
Several commenting parties recommended clarification of whether the
proposed rule would apply to both classified and unclassified data. In
the absence of explicit inclusion, this rule will not apply to
classified data. The word ``unclassified'' was added to the first
sentence in Sec. 126.18(a) as a qualifier to make the point clearer.
We note that the release of classified data to foreign persons is
governed by separate National Disclosure directives and policies. To be
clear, this rule is not a grant of a separate authority for the
transfer of classified information.
Several commenting parties expressed concern about the record-
keeping requirements, especially where local privacy laws may apply. We
note that the records in question are intended for use by DDTC, a
governmental entity for governmental use and not for public release.
DDTC's function in this capacity is analogous to the exchange of
information with cross-border law enforcement agencies that regularly
receive and have a similar obligation to protect information subject to
privacy laws.
Regulatory Analysis and Notices
Administrative Procedure Act
The Department of State is of the opinion that restricting defense
article exports is a foreign affairs function of the United States
Government and that rules implementing this function are exempt from
Sec. 553 (Rulemaking) and Sec. 554 (Adjudications) of the
Administrative Procedure Act. Although the Department is of the opinion
that this rule is exempt from the rulemaking provisions of the APA, the
Department published this rule with a 60-day provision for public
comment and without prejudice to its determination that restricting
defense article exports is a foreign affairs function.
Regulatory Flexibility Act
Since this amendment is not subject to the provisions of 5 U.S.C.
Sec. 553(b), it does not require analysis under the Regulatory
Flexibility Act.
Unfunded Mandates Reform Act of 1995
This amendment does not involve a mandate that will result in the
expenditure by State, local, and tribal governments, in the aggregate,
or by the private sector, of $100 million or more in any year and it
will not significantly or uniquely affect small governments. Therefore,
no actions were deemed necessary under the provisions of the Unfunded
Mandates Reform Act of 1995.
Small Business Regulatory Enforcement Fairness Act of 1996
This amendment has been found not to be a major rule within the
meaning of the Small Business Regulatory Enforcement Fairness Act of
1996.
Executive Orders 12372 and 13132
This amendment will not have substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government. Therefore, in accordance with Executive
Order 13132, it is determined that this amendment does not have
sufficient federalism implications to require consultations or warrant
the preparation of a federalism summary impact statement. The
regulations implementing Executive Order 12372 regarding
intergovernmental consultation on Federal programs and activities do
not apply to this amendment.
Executive Order 12866
The Department of State does not consider this rule to be a
``significant regulatory action'' under Executive Order 12866, section
3(f), Regulatory Planning and Review. The Department is of the opinion
that restricting defense articles exports is a foreign affairs function
of the United States Government and that rules governing the conduct of
this function are exempt from the requirements of Executive Order
12866.
Executive Order 13563
The Department of State has considered this rule in light of
Section 1(b) of Executive Order 13563, dated January 18, 2011, and
affirms that this regulation is consistent with the guidance therein.
Executive Order 12988
The Department of State has reviewed the proposed amendment in
light of sections 3(a) and 3(b)(2) of Executive Order 12988 to
eliminate ambiguity, minimize litigation, establish clear legal
standards, and reduce burden.
[[Page 28177]]
Executive Order 13175
The Department of State has determined that this rulemaking will
not have tribal implications, will not impose substantial direct
compliance costs on Indian tribal governments, and will not pre-empt
tribal law. Accordingly, the requirement of Section 5 of Executive
Order 13175 does not apply to this rulemaking.
Paperwork Reduction Act
The Department of State is of the opinion that this rule does not
impose any new reporting or recordkeeping requirements subject to the
Paperwork Reduction Act, 44 U.S.C. Chapter 35, but will provide a
separate Federal Register notification regarding such requirements.
List of Subjects in 22 CFR Parts 120, 124, and 126
Arms and munitions, Exports.
Accordingly, for the reasons set forth above, Title 22, Chapter I,
Subchapter M, parts 120, 124, and 126 are amended as follows:
PART 120--PURPOSE AND DEFINITIONS
0
1. The authority citation for part 120 continues to read as follows:
Authority: Secs. 2, 38, and 71, Pub. L. 90-629, 90 Stat. 744 (22
U.S.C. 2752, 2778, 2797); 22 U.S.C. 2794; E.O. 11958, 42 FR 4311;
E.O. 13284, 68 FR 4075; 3 CFR, 1977 Comp. p. 79; 22 U.S.C. 2651a;
Pub. L. 105-261, 112 Stat. 1920.
Sec. Sec. 120.33 through 120.38 [Reserved]
0
2. Add reserved Sec. Sec. 120.33 through 120.38 and Sec. 120.39 to
read as follows:
Sec. 120.39 Regular employee.
(a) A regular employee means for purposes of this subchapter:
(1) An individual permanently and directly employed by the company,
or
(2) An individual in a long term contractual relationship with the
company where the individual works at the company's facilities, works
under the company's direction and control, works full time and
exclusively for the company, and executes nondisclosure certifications
for the company, and where the staffing agency that has seconded the
individual has no role in the work the individual performs (other than
providing that individual for that work) and the staffing agency would
not have access to any controlled technology (other than where
specifically authorized by a license).
PART 124--AGREEMENTS, OFF-SHORE PROCUREMENT AND OTHER DEFENSE
SERVICES
0
3. The authority citation for part 124 continues to read as follows:
Authority: Sec. 2, 38, and 71, Pub. L. 90-629, 90 Stat. 744 (22
U.S.C. 2752, 2778, 2797); E.O. 11958, 42 FR 4311; 3 CFR 1977 Comp.
p. 79; 22 U.S.C. 2651a; 22 U.S.C. 2776; Pub. L. 105-261.
0
4. In Sec. 124.8, paragraph (5) is revised to read as follows:
Sec. 124.8 Clauses required both in manufacturing license agreements
and technical assistance agreements.
* * * * *
(5) The technical data or defense service exported from the United
States in furtherance of this agreement and any defense article which
may be produced or manufactured from such technical data or defense
service may not be transferred to a foreign person except pursuant to
Sec. Sec. 124.16 and 126.18, as specifically authorized in this
agreement, or where prior written approval of the Department of State
has been obtained.
* * * * *
0
5. Section 124.16 is revised to read as follows:
Sec. 124.16 Special retransfer authorizations for unclassified
technical data and defense services to member states of NATO and the
European Union, Australia, Japan, New Zealand, and Switzerland.
The provisions of Sec. 124.8(5) of this subchapter
notwithstanding, the Department may approve access to unclassified
defense articles exported in furtherance of or produced as a result of
a TAA/MLA, and retransfer of technical data and defense services to
individuals who are dual national or third-country national employees
of the foreign signatory or its approved sub-licensees, including the
transfer to dual nationals or third-country nationals who are bona fide
regular employees, directly employed by the foreign signatory or
approved sub-licensees, provided they are nationals exclusively of
countries that are members of NATO the European Union, Australia,
Japan, New Zealand, and Switzerland and their employer is a signatory
to the agreement or has executed a Non Disclosure Agreement. The
retransfer must take place completely within the physical territories
of these countries or the United States. Permanent retransfer of
hardware is not authorized.
PART 126--GENERAL POLICIES AND PROVISIONS
0
6. The authority citation for part 126 continues to read as follows:
Authority: Secs. 2, 38, 40, 42, and 71, Pub. L. 90-629, 90
Stat. 744 (22 U.S.C. 2752, 2778, 2780, 2791, and 2797); E.O. 11958,
42 FR 4311; 3 CFR, 1977 Comp., p.79; 22 U.S.C. 2651a; 22 U.S.C.
287c; E.O. 12918; 59 FR 28205, 3 CFR, 1994 Comp. p. 899; Sec. 1225,
Pub. L. 108-375.
Sec. Sec. 126.16 and 126.17 [Reserved]
0
7. Add reserved Sec. Sec. 126.16 and 126.17 and Sec. 126.18 to read
as follows:
Sec. 126.18 Exemptions regarding intra-company, intra-organization,
and intra-governmental transfers to employees who are dual nationals or
third-country nationals.
(a) Subject to the requirements of paragraphs (b) and (c) of this
section and notwithstanding any other provisions of this part, and
where the exemption provided in Sec. 124.16 cannot be implemented
because of applicable domestic laws, no approval is needed from the
Directorate of Defense Trade Controls (DDTC) for the transfer of
unclassified defense articles, which includes technical data (see Sec.
120.6), to or within a foreign business entity, foreign governmental
entity, or international organization that is an authorized end-user or
consignee (including approved sub-licensees) for those defense
articles, including the transfer to dual nationals or third-country
nationals who are bona fide regular employees, directly employed by the
foreign consignee or end-user. The transfer of defense articles
pursuant to this section must take place completely within the physical
territory of the country where the end-user is located, where the
governmental entity or international organization conducts official
business, or where the consignee operates, and be within the scope of
an approved export license, other export authorization, or license
exemption.
(b) The provisions of Sec. 127.1(b) are applicable to any transfer
under this section. As a condition of transferring to foreign person
employees described in paragraph (a) of this section any defense
article under this provision, any foreign business entity, foreign
governmental entity, or international organization, as a ``foreign
person'' within the meaning of Sec. 120.16, that receives a defense
article, must have effective procedures to prevent diversion to
destinations, entities, or for purposes other than those authorized by
the applicable export license or other authorization (e.g., written
approval or exemption) in order to comply with the applicable
[[Page 28178]]
provisions of the Arms Export Control Act and the ITAR.
(c) The end-user or consignee may satisfy the condition in
paragraph (b) of this section, prior to transferring defense articles,
by requiring:
(1) A security clearance approved by the host nation government for
its employees, or
(2) The end-user or consignee to have in place a process to screen
its employees and to have executed a Non-Disclosure Agreement that
provides assurances that the employee will not transfer any defense
articles to persons or entities unless specifically authorized by the
consignee or end-user. The end-user or consignee must screen its
employees for substantive contacts with restricted or prohibited
countries listed in Sec. 126.1. Substantive contacts include regular
travel to such countries, recent or continuing contact with agents,
brokers, and nationals of such countries, continued demonstrated
allegiance to such countries, maintenance of business relationships
with persons from such countries, maintenance of a residence in such
countries, receiving salary or other continuing monetary compensation
from such countries, or acts otherwise indicating a risk of diversion.
Although nationality does not, in and of itself, prohibit access to
defense articles, an employee who has substantive contacts with persons
from countries listed in Sec. 126.1(a) shall be presumed to raise a
risk of diversion, unless DDTC determines otherwise. End-users and
consignees must maintain a technology security/clearance plan that
includes procedures for screening employees for such substantive
contacts and maintain records of such screening for five years. The
technology security/clearance plan and screening records shall be made
available to DDTC or its agents for civil and criminal law enforcement
purposes upon request.
Dated: April 26, 2011.
Ellen O. Tauscher,
Under Secretary, Arms Control and International Security, Department of
State.
[FR Doc. 2011-11697 Filed 5-13-11; 8:45 am]
BILLING CODE 4710-25-P